What is the best way to use lease options in real estate? Today I’m going to teach you how to spot an opportunity to use this awesome gem.
You may have heard about lease options in real estate, but maybe you have no idea what they are or how to use them. I assure you, they are amazing. These awesome puppies are the exact way that I have been able to buy over 30 properties without any of my own money and make a massive profit.
If you are ready to find out more, now is your chance!
How to Use Lease Options in Real Estate
Lease options in real estate are beautiful strategies to use in the buying process of a real estate transaction. When you use one you do not have to put a lot of money down, go to the bank for a mortgage, or even need a realtor or license.
A lease option in real estate is a shorthand for “lease with option to purchase real property.” That is a mouthful. So, the brilliant real estate world has shortened that 7-word phrase down to two words.
My favorite way to help women buy houses without banks or a license, and I do it every day. The way we do that, though, is with lease options. They are the ultimate method for jumping into real estate with the least risk.
Now, let’s talk about the seller. Why do you think a seller might want to sell a property to you?
Believe it or not, there are LOADS of sellers ready to get rid of a property for one reason or another. We all know people with a mortgage, and you are probably even one of those people. But, sometimes people get a job transfer or get divorced. Other times they inherit their mom’s house and need to move across the country. I have heard situations where a couple’s kid moved back to their home with their grandkids, so now the house was not big enough.
There are a million and one reasons why people need to get out a house fast.
In wholesaling, the goal is to give a lowball offer in order to capitalize on profit as much as possible. But, in many cases mentioned above the homeowner may owe as much as the house is worth. In those cases, a low ball offer won’t work. So, what do you do? The answer, of course, is lease options.
Lease options in real estate provide a quick opportunity for you to help the homeowner right now but give you 10-15 years to work out the numbers. During that time you will be able to pay down the mortgage total while having tenants, as well as build up equity in the property. At the end of that time, you will likely owe very little on the house and be able to sell it at a profit. Or, one of your tenant-buyers will be able to enact their lease option and buy the property outright. So, everybody wins.
Lease options in real estate work in hot markets; it works in slow markets. It works in your market.
Imagine what other options these sellers have. If they owe as much as the house is worth and then have to pay a real estate agent 6-7%, they are going to still come out owing on the mortgage once they sell. That does not sound like a good idea.
Wholesaling is not an option, because they are only going to offer about $0.60-$0.70 on the dollar of its value. That will make them have to pay even more than just working with a realtor.
The final option these sellers also come up with is thinking they can just rent the property. And that is where you come in. These people are called “accidental landlords.” They didn’t buy the house in order to be a landlord. Instead, they became landlords on accident, and because they did not know how else to pay their mortgage.
Usually, when these people become accidental landlords, they are not very good at it. They don’t have the contracts, paperwork, contacts, or the brass ovaries to run things. Ultimately, they are woefully unprepared but feel stuck in a corner.
They don’t want to be a successful real estate investor, but just want to get rid of their house.
YOU want to be a successful real estate investor, and it is your job to help these people.
For situations like this, lease options are perfect. These people cannot owner finance their house, because they do not own it free and clear. They do not want to rent their house, because it is just too stressful on top of normal life. It is not reasonable to list it with an agent or work with a wholesaler because they would end up still owing at the end.
You are literally the only person who can help them because you know what a lease option is in real estate.
This is why in First Deal Done Fast (FDDF) I teach my ladies how to fill out the contracts, talk to the sellers, and how to bring up lease options in real estate without scaring the sellers. If you want to know more about that go to getyourfirstdeal.com. With FDDF you will learn everything I know about how to buy houses without banks or a license.
But back to lease options…
So, you get to come in and help this seller right away:
“Hi, Mr. Seller. I am happy to help you out with this property. I’ll put down about $10 vested interest (since the law says), and I’ll take over paying your mortgage for the next 10-15 years. If you want to, we can go longer than that. It will have to be 10-15 years since you owe what the house is worth and I need the time to build up the equity to make this work for both of us.
I will solve your problem today, and cash you out in a couple of years. And, it is not going to cost you anything.”
I’m telling y’all sellers love lease options in real estate. They love when someone comes in and takes their real estate problem away. And that is what you’re going to do.
So, I hope by now you see the incredible value that lease options bring to real estate. Don’t wait another minute to learn all you can about this amazing opportunity to help sellers everywhere in any situation.
You’re going to love it.
Comment below if this sounds like an amazing option to you and tell me what you love about it!